On a global scale, the market for the food delivery industry accounts for €83 billion.
And get this, in 2016 the revenue in the online food delivery industry amounted to $64,851M while in 2019 it had climbed to $107,438M.
So, if you are planning to create a food delivery website or an application for food delivery, this is the perfect time to get on board.
1) Food Delivery Market
The market for food delivery has been growing for years now. According to Crunchbase, there are more than 1500 companies which specialize in food delivery or are related to the food industry. In terms of geographic regions, first place goes to the USA (30%), second is Europe (25%) and then Asia (25%). Currently, South America, Canada, Africa and Australia (20%) are at the end of the list.
In 2019, more than 30 companies started a food delivery business. In addition, the average estimated revenue per user in the B2C food delivery segment amounts to $99.79.
It is expected that the revenue will grow 7.5% each year and by 2024 the revenue will be $164,002M in total. Not bad, huh?
The food delivery market has both local and internationally-oriented companies.
Let’s have a look at the TOP 7 biggest players in the food delivery market.
Later, we’ll take a closer look at their core features.
Types of Online Food Delivery Websites and Apps
Since the era of digitalization, the need to order food online has never been bigger than it is now. That’s why many entrepreneurs are thinking of the type of online food delivery website or app they want to create and how to make a food delivery website.
There are two major types of food delivery apps:
Order only/food aggregator app
This type stands for a food delivery app that provides the ability to search for restaurants and cafes, view their menus and prices, order and pay online.
However, this type of application for food delivery does not handle logistics. It simply allows users to order and then forwards the order to the restaurant where the food delivery is actually managed.
Such an online food delivery business usually constitutes an aggregator or a marketplace. Basically, an aggregator or a marketplace is a middleman between suppliers (restaurants) and customers.
Aggregators charge a fixed percentage of the order paid by the restaurant. They usually don’t charge customers any additional costs.
Examples: FoodBoss, Zomato
Order & Delivery
This type of online food delivery service is a more popular one. It is beneficial both for restaurants and for your online food delivery business. With an order & delivery type of food app, restaurants are able to focus on preparing food and not delivering it. Plus, they have no need for hiring additional personnel.
This model is especially popular with food delivery startups as they don’t have to develop an extra app for handling deliveries. Here everything goes through one app.
Another reason why startups love this model is revenue. Not only does the platform charge the restaurants, but it also charges the users. However, order & delivery food services also have a downside: they involve more players on the field, such as suppliers, customers, drivers and admins.
Examples: UberEats, Deliveroo, Swiggy.
2) How Food Delivery Apps Make Money
Judging by the revenue growth that we’ve talked about earlier, the food industry is a goldmine. Well, let’s see how you can mine some gold with your future food app.
Basically, there are three main food delivery service business models::
With a commission fee, your platform will be charging the restaurant for every order that is placed. For example, UberEats charges 15%-40% from each received order.
With a delivery fee, a platform charges customers for using their services. It can be either a fixed fee like UberEats used to have or a calculated fee based on the distance between customers and restaurants like what UberEats has now.
With a subscription fee, a platform charges users a fixed fee. In return, users get access to free, unlimited delivery and exclusive access to cafes and restaurants that are unavailable to regular users. Some examples of using such a monetization model are Deliveroo Plus and Swiggy Super.
ADDITIONAL: Advertising Fee
Restaurants that your platform is going to partner with could easily promote their brand within your food delivery website or app. By paying a fee, restaurants increase their visibility on the app, thus raising their chances of getting more orders. That’s how an app owner gets its extra marketing profit and advertising fee.
NB: Keep in mind that you can use all three of these food delivery service business models, as long as you bring enough value to both parties.
3) How to Make a Food Delivery Website: Three Approaches
Basically, there are three ways to build a food delivery app:
1. All-in-one app
An all-in-one food delivery app is an app that is designed for all user roles. Different kinds of interfaces, functionality and restrictions appear depending on the type of user role. This is actually a pretty comprehensive app with complex architecture.
2. Separate Apps for each user role
The second approach to food delivery application development refers to building different deliverables of a food delivery app. This includes:
- Customer app
- Restaurant app
- Admin app
- Driver’s app
The reason for separate food delivery application development lies in faster loading time of those apps and a more customized approach for each group of users.
3. API integration
With API integration, it becomes easier to manage food orders. In this case, you won’t be including a restaurant side in an app. Instead, you’ll create an API which restaurants will be able to integrate on their websites or web app.
Must-have Features for an Online Food Delivery Website or App
Sometimes it is extremely hard to decide what features to develop first especially when you are building an MVP for a startup. There are some factors that should be taken into account, such as budget, UVP and priority.
We have studied 7 key players in the food delivery market and are ready to shed some light on the main functionality of these applications for food delivery.
Here are the features we found to be crucial when taking into account how to build a food delivery website or app:
Here comes an important aspect – though registration is significant for your app, you shouldn’t ask a customer to register as soon as they enter your platform because it may scare away the customer and lead to big user losses.
For a food delivery website, it is common to ask a customer to register right before paying for the order. This way a customer won’t back out as they have already spent a lot of time searching and customizing their order.
Needless to say that registration should be quick and simple. You can either ask a person to register with an email or a phone number or using some social media like Google or Facebook.
Warning: always ask for a phone number – that’s how you’ll be able to contact a user and confirm an order. Also, perform a validation of the phone number when a customer registers not when they’ve placed an order.
Search is probably one of the most important features while considering how to build a food delivery app. Before searching for food, a user enters an address or a postcode of a place to where an order must be delivered. After doing so, the website shows available restaurants in that region.
Using either a keyword or filter, users can search a list of restaurants already displayed.
However, there is another available option – a platform can offer users various restaurants according to certain categories which can’t be filtered. For example, on UberEats, you can search by keyword or alternatively you can check out the ‘special offers’, ‘popular near you’ and ‘new on UberEats’ categories. This model gives specific restaurants higher visibility on the platform. Besides the above-mentioned services, Postmates also uses such a search principle.
A lot of food websites and applications for food delivery give the ability to choose whether a customer would like the food to be picked up or delivered. This filter can be offered at the beginning of the search or together with the other filters.
As an enhanced filtering system, you can display the available restaurants on a map or in a list. To show users that your platform takes extra interest in their well-being, you can build a filter based on dietary requirements (e.g. dairy-free, gluten-free, kosher, lactose-free, vegan, vegetarian), as Deliveroo did.
Besides filtering, your users should be able to sort the food options by:
- Delivery fee
- Delivery time
- Product price
- Popular/Best match
After choosing a restaurant or a dish, a user should be forwarded to a restaurant page where they will be able to order.
A standard restaurant page should have:
- Name and basic info about the restaurant
- Reviews (stars & feedback)
- Food customization
- Delivery costs
- Menu by category and prices
- Tags (Postmates)
- Trending restaurants (DoorDash)
- Options nearby (Postmates, DoorDash)
- Trending categories (DoorDash)
- Possible allergies (Just Eat)
Here comes another marketing trick: when a user chooses a certain dish from a restaurant, it doesn’t go straight to the cart. Instead, a user is forwarded to the restaurant’s page where they get to look through the entire menu in order to find what they’ve been looking for. This way, delivery food applications and websites encourage customers to order more.
There are two payment methods available for users:
- in cash (Takeaway, Just Eat)
- via a credit card (UberEats, Deliveroo, Grubhub)
- both in cash or via a credit card (Takeaway, JustEat).
In order for users to pay with a credit card, you can integrate Stripe, PayPal or another trusted payment gateway.
Don’t forget that it is crucial to ask for a phone number before a user can pay. This way your platform will be able to confirm an order and a driver would be able to contact a customer for any additional details.
In reviews we trust. Reviews provide a customer with actual proof of whether a particular restaurant is good or not. So, while determining how to create a food delivery website keep in mind that reviews are particularly helpful to customers who are new to ordering food online.
For a more all-round review, the users could have the ability to upload photos of delivered food and provide other users with a complete impression.
You can set reviews and ratings on:
- Restaurants: customers should be able to leave a review on the restaurant and the food after delivery was made. This way restaurants can improve their menus and meals.
- Delivery platform: customers should be able to rate a driver who did a delivery. This way you can see which deliveryman is better and which can’t cope with deliveries. Such a review system is used by UberEats: if an Uber driver has too many low reviews, their account is put on hold until they pay for an Uber training session.
Unique Features for an Online Food Delivery Website or App
Besides building the basic features you might want to think about adding some features that would be unique or bring your users some extra benefits.
1. Real-time tracking of an order
Technology has come to the point where customers can track drivers while waiting for a ride. Who’s to say that they can’t track their food?
Real-time tracking of the food order has been introduced by the famous UberEats. Many other food ordering apps have integrated this feature as well, including Postmates and GrubHub.
How does real-time tracking work?
First, the integrated GPS (Google Maps API) on a platform identifies a user’s location without the user’s need to enter the address. In order to deliver the food, a user’s location is given to the delivery man for better navigation. At the same time, users can track their order by using a website or a website for food delivery.
2. Estimated time of delivery
Isn’t it convenient to know exactly when your food will arrive?
Online food delivery websites and apps such as UberEats and Postmates have already designed such a mechanism that is able to estimate the exact delivery time.
This was made possible thanks to machine learning. The estimation is made according to different factors, including:
– delivery address
– driver’s location
– quantity of orders
– traffic conditions.
The thing is you need to decide what matters to you the most: it can be either an order price or an order with perishable foods.
If prices on food and delivery are the same give or take, then the solution comes down to minimizing time or costs.
3. Food preferences
Such a unique feature as food preferences was implemented on one of our projects called SimpleCater. It is an online platform where users can order some food and get it delivered. However, the difference is that users don’t get to search for the restaurants, they simply put their food preferences, time and date for the delivery, number of people and a budget per person. After sending a request, the system suggests three different menus. The user then either accepts one of the menus or rejects all of them.
This feature is especially helpful to those customers who don’t know exactly what to order.
In a nutshell, the food delivery market is growing rapidly. The estimated revenue of the online food delivery industry reached $107,438M in 2019. Each year more and more applications for food delivery appear, and the key food market players, in turn, keep adding more unique features like real-time tracking of the order or automated calculated delivery time.
But the bottom line is while thinking of how to create a food delivery website or app, you’ll need to build at least five basic features: registration, search system, ordering, payment and reviews.
If you have any concerns about how to start a food delivery app, don’t hesitate to contact us for a free consultation.